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Re: Portfolio simulation tools

In the FAQ data sources, I can't figure out what is referencing intermediate term bonds (AGG) on the user input site. You have a tax exempt intermediate term bonds. But why no ordinary int. term bonds that track the AGG as your data source suggests?
by DR
Mon Dec 08, 2014 8:27 am
 
Forum: Investing - Theory, News & General
Topic: Portfolio simulation tools
Replies: 12
Views: 1913

Re: Suddenly Retired, do I have enough?

I'm a little late to the discussion here, but someone mentioned Firecalc, so I thought I'd mention ESPlanner. I am an expert using this dynamic planning calculator. There's really not enough information here to get a reliable report, but there is enough to get a sense of the cash flow issues I think...
by DR
Sun Dec 07, 2014 11:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Suddenly Retired, do I have enough?
Replies: 42
Views: 6816

Re: How to describe HSA tax advantage return

Right. Yes, it's just for me in my own mind.
by DR
Wed Nov 05, 2014 9:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to describe HSA tax advantage return
Replies: 2
Views: 449

Re: Planning our retirement

You might be asking about asset allocation? For myself, I'm mostly concerned with lifetime discretionary spending. If I can enjoy a lifetime discretionary spending (i.e, available spending after any off the tops like mortgage, Medicare Part B, contributions to retirement) of (I'll guess at some numb...
by DR
Wed Nov 05, 2014 2:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Planning our retirement
Replies: 3
Views: 440

How to describe HSA tax advantage return

Hi Folks, I recently did some analysis on using my HSA as a savings tool. The case looks like this: --28% tax bracket 4% state taxes --able to contribute the "catch-up" maximum of $7,550 per year for the next six years --assume 3% nominal return on the HSA and 3% on the taxable account (ac...
by DR
Wed Nov 05, 2014 2:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to describe HSA tax advantage return
Replies: 2
Views: 449

Re: Portfolio simulation tools

http://portfoliovisualizer.com/

I think this one is pretty cool.
by DR
Sat Nov 01, 2014 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: Portfolio simulation tools
Replies: 12
Views: 1913

Re: What are you up YTD?

I'm up 5.73 (annualized) YTD

21% S&P index
79% intermediate bonds

Not much volatility for me this year.
by DR
Sat Nov 01, 2014 3:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: What are you up YTD?
Replies: 213
Views: 18786

Re: struggling to understand "bond crash"

Yes, there's a lot of that kind of talk out there. But in this talk it's often easy to miss distinctions that these writers do not point out (because it would lower the scare factor in the narrative). For example, the concern we should have is holding long term bonds (in most but not all situations)...
by DR
Mon Sep 01, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: struggling to understand "bond crash"
Replies: 13
Views: 2152

Re: Resetting Equity Target -a.k.a Portfolio Allocation

It seems way too doctrinaire or absolutist to be saying what allocation he "should" have. For example, why say "25% stocks is way too low"? I don't see how anyone can make this evaluation for someone with such certainty or confidence. His software (ESPlanner) shows him his living...
by DR
Mon Sep 01, 2014 9:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Resetting Equity Target -a.k.a Portfolio Allocation
Replies: 19
Views: 1323

Re: Which retirement plan is better?

Again, I think it's interesting (and encouraging I think) that a defined benefit plan (pension) is offered at a university--or anywhere these days I guess. Even though I like the guarantee that goes with the pension, I would probably choose the 403b and contribute--particularly here where my rough m...
by DR
Thu Jul 18, 2013 2:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which retirement plan is better?
Replies: 24
Views: 1842

Re: Which retirement plan is better?

My university in Michigan does a 12% match in the 403b. I'm surprised to learn there are universities that offer a DB plan.
by DR
Thu Jul 18, 2013 11:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Which retirement plan is better?
Replies: 24
Views: 1842

Re: Which retirement plan is better?

I figured 30 years old and retiring at age 65. I assumed inflation at 3% and a salary that keeps pace with that but he'll do better than that since promotion to full means some boost to salary etc. But I double checked my numbers and I see now that I didn't look far enough down my table. I reran the...
by DR
Thu Jul 18, 2013 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Which retirement plan is better?
Replies: 24
Views: 1842

Re: Which retirement plan is better?

My calculator (ESPlanner) shows it's pretty much a wash, with the Pension option doing a little better. But, there's so many, many assumptions that have to be made that it's hard to compare without a lot more information. Furthermore, it's not really apples to apples: for the defined benefit plan ma...
by DR
Thu Jul 18, 2013 9:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Which retirement plan is better?
Replies: 24
Views: 1842

Re: Dinner Guest Issues

Do you live in Michigan? I'll come and not complain!
by DR
Tue Jan 01, 2013 6:14 pm
 
Forum: Personal Consumer Issues
Topic: Dinner Guest Issues
Replies: 149
Views: 12296

Re: 2013 BOGLEHEAD CONTEST REGISTRATION

1611.06
by DR
Tue Jan 01, 2013 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: 2013 BOGLEHEAD CONTEST REGISTRATION
Replies: 481
Views: 15529

Re: What was your 2012 return?

Results for 2012: CAGR 10.68% AVG Monthly Return 0.85% SD Monthly Return 0.83% Sharpe 1.03 At the end of 2012, portfolio is about 30/70 stocks/bonds. At the end of 2011, portfolio was about 12/88 stocks/bonds, so I added stocks during the 2012. Basically I bought VEU and VGK every time they dipped....
by DR
Tue Jan 01, 2013 2:10 pm
 
Forum: Investing - Theory, News & General
Topic: What was your 2012 return?
Replies: 275
Views: 20403

Re: How to calculate return on a portfolio

Yes, that looks correct now! Excellent, thanks again for your help! I've always been curious how to properly calculate my return across both investment vehicles and now I know and have a working example for 2013 and beyond, very happy about that. Thanks! Yes, I really like the XIRR function. If you...
by DR
Tue Jan 01, 2013 11:22 am
 
Forum: Investing - Theory, News & General
Topic: How to calculate return on a portfolio
Replies: 55
Views: 3972

Re: How to calculate return on a portfolio

Yes, that looks correct now!
by DR
Tue Jan 01, 2013 10:42 am
 
Forum: Investing - Theory, News & General
Topic: How to calculate return on a portfolio
Replies: 55
Views: 3972

Re: How to calculate return on a portfolio

I don't believe you want to divide by 100 there in the formula. It is already going to give you a percentage. The return on that series is 2408.44% ! That's because you begin with $416 and end with $114K. I suspect you went into 2012 with some existing balance? You contributed 14,754 but end with $1...
by DR
Tue Jan 01, 2013 10:29 am
 
Forum: Investing - Theory, News & General
Topic: How to calculate return on a portfolio
Replies: 55
Views: 3972

Re: How to calculate return on a portfolio

It appears you may not have entered a beginning balance for the first entry at the beginning of the year.
by DR
Tue Jan 01, 2013 10:22 am
 
Forum: Investing - Theory, News & General
Topic: How to calculate return on a portfolio
Replies: 55
Views: 3972

Re: FSTVX vs VTSAX

Well, the VTSAX is cheaper.
by DR
Tue Jan 01, 2013 10:06 am
 
Forum: Investing - Help with Personal Investments
Topic: FSTVX vs VTSAX
Replies: 57
Views: 3668

Re: 3-Fund Approach Asset Allocation help

It's always kind of fun this time of year getting one's financial house in order! Good job. It's difficult to say the right allocation for somebody else. The 60/40 split is intense on stocks if you follow the conventional Bogle guide to hold bond percentage equal to your age (58% bonds). (See variou...
by DR
Tue Jan 01, 2013 10:02 am
 
Forum: Investing - Help with Personal Investments
Topic: 3-Fund Approach Asset Allocation help
Replies: 5
Views: 953

Re: What was your 2012 return?

I ended up at 6.37% overall annual return on a 15/85 (stocks/bonds) portfolio tracked with XIRR to track monthly contributions. The bonds were mostly positioned in FBIDX but also some ABNDX. My stocks were a mix of some American growth funds--my best performing equities fund was SMCWX where I got a ...
by DR
Mon Dec 31, 2012 10:53 pm
 
Forum: Investing - Theory, News & General
Topic: What was your 2012 return?
Replies: 275
Views: 20403

Re: Question about rate of return using XIRR

I don't believe you have to then separately calculate the geometric mean on that series of annualized returns. You simply run the XIRR function over the entire set of years at once--and this will give you the geometric mean or annualized return for the entire period.
by DR
Sun Dec 30, 2012 2:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about rate of return using XIRR
Replies: 10
Views: 1107

Re: "The rational thing to do is get out of bonds now."

Muchtolearn wrote:Another remarkable post by Nisiprius.


I agree. Nisiprisus, you should write a book.
by DR
Fri May 11, 2012 9:20 am
 
Forum: Investing - Theory, News & General
Topic: "The rational thing to do is get out of bonds now."
Replies: 130
Views: 10387

Re: bonds and bond funds once again

What I was thinking here was the principle that is outlined in this Schwab paper by Rob Williams: http://www.schwab.com/public/schwab/research_strategies/market_insight/investing_strategies/bonds/should_you_worry_about_bond_funds_if_interest_rates_rise.html I read your reference, but it just seems ...
by DR
Tue Sep 20, 2011 11:58 am
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

Re: bonds and bond funds once again

I can't follow that reasoning at all. If you are going to profit from future higher bond interest rates, you have to buy bonds in the future when the rates are high, not now. What I was thinking here was the principle that is outlined in this Schwab paper by Rob Williams: http://www.schwab.com/publ...
by DR
Tue Sep 20, 2011 10:23 am
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

You should never give the initials "FBDIX" and assume we know what you are talking about. You should write out the names of the funds in your post. You also spelled the fund "FBDIX" one time, and "FBIDX" the other time. FBDIX is the Franklin Biotechnology Discovery A F...
by DR
Tue Sep 20, 2011 9:22 am
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

Re: bonds and bond funds once again

Spend a little time on Morningstar comparing FBNDX (a Fidelity bond fund which I'm using because it's an intermediate-term, investment-grade bond fund that's roughly comparable with VBMFX, but goes back to 1971) and Vanguard Wellesley Income (VWINX), which is around 40%, and ask yourself how you fe...
by DR
Tue Sep 20, 2011 8:43 am
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

It is commonly said that the best predictor of total bond returns is current yield. So I suspect if you went back 60 months, you'd probably see a yield very close to 5.5%. If rates had remained flat, you would have gotten 5.5% entirely as interest. If rates had gone up, you would have gotten more i...
by DR
Tue Sep 20, 2011 7:46 am
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

Thanks nisiprius. I'm pretty familiar with Bodie's Worry Free Investing. Indeed, his book has influenced my thinking about a 100% bond fund--but perhaps as you say I'm taking it to an extreme. He has next to nothing to say in that book about using bond funds or TIPS funds compared to buying the bond...
by DR
Tue Sep 20, 2011 7:16 am
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

Mamster--those are good points. I like this notion of not buying something from the past! Right now the yield on that FBIDX fund is 2.89% and as of 8/31/2011 the YTD growth is 5.73%. Well, to be more precise, an investment of 10K in this fund on 1/1/2011 would, as of 9/16/2011 would be $10,619. I am...
by DR
Mon Sep 19, 2011 8:54 pm
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

FBDIX from 1990-2005 the five-year rolling average rate of return is clearly between 6% and 9%. After 2005, the five year average looked at each month as a rolling rate is between 3% and 6%, just eyeballing it looks to be around 4%. But these are total returns. Now of course this could be a 20 year ...
by DR
Mon Sep 19, 2011 8:46 pm
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

Thanks much everyone! I have read over and over that the interest rate change up or down has only a temporary impact on the total return. So it's not the declining interest rate environment that is causing these five-year rolling returns of 4%-6%. It's the dividends that are paid on the bond fund th...
by DR
Mon Sep 19, 2011 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

See the rolling returns on 60 months over the last twenty years on this fund. I think you are ignoring dividend payments and reinvested interest on the bond funds. You are only looking at yield. Total return comprises price, coupon, and interest on interest. http://quote.morningstar.com/fund/chart.a...
by DR
Mon Sep 19, 2011 6:24 pm
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

bonds and bond funds once again

I'm 53 and currently allocated across a range of stocks (60%) and the other 40% is mostly in FBIDX (SPARTAN US BOND INDEX). (I'm a Fidelity user). I want to get 100% into FBIDX or perhaps 90/10 and I've been reading all that I can trying to see if I can find an argument against this move. I'm confid...
by DR
Mon Sep 19, 2011 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: bonds and bond funds once again
Replies: 31
Views: 2668

Sorry, I didn't get a notice on that post and got busy. I'll have to get back to this. The HTML manual was put up in haste it seems without the graphics and edits in the PDF. I can't answer all those questions since I'm not a mathematician or a programmer, but I can try to find out for you from Kotl...
by DR
Tue May 19, 2009 10:20 pm
 
Forum: Investing - Theory, News & General
Topic: ESPlanner Questions
Replies: 19
Views: 4160

Yes, CaptMidnight is correct: ESPlanner is *descriptive* not *prescriptive*. That is, your highest sustainable (and smoothest) living standard is a consequence of many factors--including income, taxes, savings, types of saving, Social Security earnings history, housing expenses, children in the home...
by DR
Mon May 18, 2009 7:36 am
 
Forum: Investing - Theory, News & General
Topic: ESPlanner Questions
Replies: 19
Views: 4160

Yes, I believe what you do is apply and then suspend. This is different than the apply, take, repay strategy that is been talked about so much recently.

Just apply, then suspend. That will trigger child and spouse benefits if done in the appropriate year.

Dan
by DR
Mon May 04, 2009 12:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Oh my gosh: LOL.

I revise my comment--yeah, buy the horse.
by DR
Wed Apr 29, 2009 11:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Yes, I agree. That's pure myth. Here's another one. Your SS payment is all based on your last three years' income. That too is wrong. I have been running some cases where the retired couple has children under 18. I didn't realize that they got benefits. Very good. My program is showing some signific...
by DR
Wed Apr 29, 2009 6:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

That's pretty good--spend it on a horse! Oh well, I've spent money on less worthy things in life. I'm sure that's not true about the SS and changing jobs. But I also don't think that delaying SS means that you have to give up the child benefit or the spousal benefit. You can simply apply for benefit...
by DR
Tue Apr 28, 2009 1:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Sounds like an urban legend. :)

Dan
by DR
Tue Apr 28, 2009 12:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Yes, certainly. If you take a person born Jan. 1, 1968 and give him a salary of 70K (starting in 2009) that is sustained at that level in today's dollars through age 65 (given 3% inflation), and if he takes SS at age 65, he has an annual SS benefit of 23,502 (in today's dollars). If you have him qui...
by DR
Tue Apr 28, 2009 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Graveday: Yes, consumption smoothing is an interesting concept. It's a model that is invented, not by the financial planning industry, but by economists nearly 40 years ago. Econ's use it all the time, but FPs only recently have begun to talk about "life cycle" planning and this includes, ...
by DR
Tue Apr 28, 2009 10:28 am
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Graveday: Yes, there is no doubt that you can raise your lifetime living standard by a significant amount by postponing SS to age 70 if you consumption smooth. I suppose you could take SS early and reinvest it as suggested above, but this assumes a certain rate of return that is not risk free. If yo...
by DR
Tue Apr 28, 2009 10:05 am
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

smoothing in future SS to the present

Graveday: I agree with CaptMidnight on this one. Although I do some contract work for ESPlanner and am biased I guess, I do think that there are two ways of looking at this question. From an actuarial perspective, it's a wash I guess--but that's from the SSA perspective. From our perspective, it's n...
by DR
Tue Apr 28, 2009 9:28 am
 
Forum: Personal Finance (Not Investing)
Topic: Iy 8% per year
Replies: 28
Views: 4405

Ah yes . . . agreed. Orthodoxy lurks everywhere.
by DR
Sat Feb 02, 2008 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: Article on when to take Social Security
Replies: 114
Views: 19875

Wow, OK. I should have said, I've not heard another persuasive argument. It's really just a matter of numbers, not rhetoric, right? We are not discussing God's existence here. It's just economic numbers. I did try to qualify: if you can afford it (many cannot) and if you care about smooth consumptio...
by DR
Sat Feb 02, 2008 12:56 pm
 
Forum: Investing - Theory, News & General
Topic: Article on when to take Social Security
Replies: 114
Views: 19875

Both are good strategies. But they are not contradictory. I might have said, one way to justify taking early is using the payback option.

It sounds like you feel I shouldn't have tried to say so much. I'll be more careful next time.

DR
by DR
Sat Feb 02, 2008 12:51 pm
 
Forum: Investing - Theory, News & General
Topic: Article on when to take Social Security
Replies: 114
Views: 19875
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